Private property

By fmiren | Real World Assets | 15 Sep 2023

Private property is at the core of the liberty and civilization itself. Friedrich Hayek in his "The Fatal Conceit" notes the historical pattern: if central authorities cannot keep themselves from suppressing the freedom for their citizens by abusing the power, civilization will not advance, it even may decay. The final years of the Roman republic gave the world private law which is related to the fact that the state was governed by a parliament “whose members were deeply involved in commercial interests”. But when this gave the way to the central governance, it resulted in the collapse of the first extended order.

China provides another example. There’s a relationship between the power of the central government and the progress in civilization and industrial technology in the history Chinese empire. Periods of great difficulty, when the state was weak, lead to “advances toward civilization”. But when the government became mighty again after these recurrent “times of trouble”, it strived to preserve the traditional order.

Even capitalism and European civilization itself would not be possible without this “political anarchy”. It isn’t surprising that industrialism came into being in places, such as Southern Germany, some towns of Italy, of Netherlands, where the bourgeoisie rather than the strong central government ruled.

Hayes notes the difference between what he calls material and immaterial right. Material rights, such as private property rights are necessary for “efficient organization of the material means of production”. However, immaterial goods, such as literary works and inventions, when they become known, can be produced many times. Therefore, the law is introduced to make these goods scarce. However, Hayek thinks that this artificial, or “forced” scarcity of copyrights and patents can stifle human creativity by hindering the flow of distributed knowledge.

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